Sellers Dorsey Digest

Federal Updates

News

New OIG Report Finds Deficit in Opioid Treatment Access for Medicaid and Medicare Beneficiaries

• The HHS’ Office of Inspector General (OIG) found that, in CY 2022, 19% of counties within the U.S. did not have the appropriate medication for opioid use disorder (MOUD) services and providers. Moreover, even in counties that did have these services available, Medicaid and Medicare beneficiaries usually did not have access to them. The OIG believes that this gap in care could have been created by low reimbursement rates and Medicare Advantage (MA) plan prior authorization requirements causing claim payment delays. The OIG recommends that Medicaid reimbursement rates be reevaluated, and that CMS and Substance Abuse and Mental Health Services Administration (SAMHSA) partner to develop a list of buprenorphine providers and identify counties in need of increased access to MOUD services. Additionally, the OIG released a companion product that presents comparable and interactive county and state level data in alignment with this report (Fierce Healthcare, September 27).

Biden Administration Signs Executive Order Aimed at Tackling Gun Violence

• Following the U.S. Surgeon General’s declaration of gun violence as a public health crisis in June, on September 26, the Biden Administration issued a new executive order directing federal agencies to improve school-based active shooter drills and better combat the rising usage of 3D-printed firearms and machine gun conversion devices. Included within this executive order are clarifications for Medicaid reimbursement for counseling on firearm safety and violence intervention, giving states the option to reimburse healthcare providers for these services. CMS plans to release companion guidance later this month on how states can best incorporate Medicaid benefits into these prevention programs. The administration also announced that the DOJ will award an additional $85 million in funding for 30 agencies and organizations to expand their reach through the Community Violence Intervention and Prevention Initiative (CVIPI). Toolkits will also be released by the CDC and SAMHSA, using data visualization to inform prevention strategies and effective ways to address and educate communities affected by gun violence trauma (White House, September 26; Inside Health Policy, September 26).

SAMHSA Announces Funding Awards for Opioid Crisis Grants

• On September 26, HHS’ SAMHSA announced it would distribute over $1.5 billion in grant funding for FY2024 to support efforts to stem the opioid crisis through various programs. The State Opioid Response (SOR) grants total $1.49 billion and focus on increasing access to MOUD, drug prevention, and recovery supports. Tribal Opioid Response (TOR) grants total $63 million in funding and aim to enhance services in Tribal communities like increasing access to MOUD and recovery support. Finally, Technical Assistance grants totaling $18.5 million will be offered for training in evidence-based approaches and interventions for substance use disorders at the individual, family, and community levels. Over the years, funding has helped support the distribution of millions of naloxone kits and increase access to treatment for opioid use disorder for thousands of people (SAMHSA, September 26).

CMS Marks Medicare Advantage, Part D Premiums Stable for 2025

• As Medicare’s open enrollment window begins in a few weeks, CMS announced that average premiums in both MA and Part D will decline in 2025 with the average monthly premium in MA set to be $17 next year, a marked $1.23 down from 2024. For Part D, premiums will decline by $7.45 to $46.50 by next year. Additionally, CMS said that approximately 60% of MA beneficiaries will be enrolled in a plan that has a $0 premium for 2025 and most enrollees will have the same or lower premiums if they choose to maintain the same coverage (Fierce Healthcare, September 27).

CMS Releases New Notice of Funding Opportunity for Planning Grants

• On September 27, CMS announced a Notice of Funding Opportunity (NOFO) for planning grants that will address continuity of care for people who have been incarcerated and transition back to the community. The NOFO will make funding available for state Medicaid and CHIP agencies to address operational barriers and promote the continuity of care for eligible individuals who are inmates at public institutions. The funds will be awarded to up to 56 recipients for a 4-year period of performance with the anticipated range of awards being $1 million to $5 million per recipient. Applicants have two opportunities for submitting applications, either by November 26, 2024, or March 17, 2025 (CMCS, September 27).

Federal Litigation

Hospitals File Suit Against CMS Over Reduced DSH Payments

• Shannon Medical Center and 79 other hospitals filed a complaint against HHS in the federal DC district court in September alleging that CMS’ retroactive Medicare rule changes that reduced DSH payments are “arbitrary and capricious, an abuse of discretion and otherwise contrary to the Medicare Act and Supreme Court law.” The plaintiffs seek a reversal of several Provider Reimbursement Review Board rulings and dismissals. With the Supreme Court’s overturning of the Chevron federal agency deference concerning vague statute interpretations in June, experts suggest that hospitals may now have a stronger chance in successfully litigating cases involving statutory interpretations against CMS. Other recent cases like Lake Region Healthcare Corporation v. Becerra and Allina Health System v. Becerra have also dealt with similar issues (Inside Health Policy, September 26).

Federal Regulation and Guidance

CMS Releases SHO Letter on EPSDT Services

• On September 26, CMS released a State Health Official Letter (SHO 24-005) detailing guidance on children’s health coverage requirements for both Medicaid and CHIP. The SHO letter details policies, strategies, and best practices to maximize access and utilization of EPSDT services, focusing on ways to promote awareness of the benefit, expand the children’s health workforce, and improve care for children with complex and specialized health needs. The SHO letter also includes information and best practices on how to improve care for children in or formerly in foster care and those with behavioral health needs, building on a 2022 guidance for Behavioral Health Integration. A new HHS report and other studies show that children with access to Medicaid have improved health, educational, and economic outcomes throughout life (CMS, September 26).

CMS Releases Updated MLR Toolkit to Strengthen Medicaid and CHIP Monitoring

• On September 30, CMS released an updated Medical Loss Ratio (MLR) toolkit for states. MLR is a retrospective tool used to assess a managed care plan’s (MCP) financial performance as it reflects the portion of premium revenue in which a plan allocates to covered health services and quality improvement activities (QIA) to enhance the quality of health versus administrative expenses and profits. The updated toolkit contains regulations and standards relating to MLR data collection and validation, best uses for the data, guidance on reporting, considerations, and implementation resources. The toolkit also contains a periodic audit requirement, where states will be required to conduct audits of encounter and financial data submitted by MCPs at least once every 3 years, under 42 CFR §438.602(e) (CMS, September 30).

CMS Releases Infographic on ADHD in Children

• On October 1, CMS released an infographic that provides an overview of ADHD prevalence in Medicaid and CHIP enrolled children as well as characteristics of beneficiaries with ADHD and treatment utilization. Children with public coverage had statistically significant higher rates of ADHD compared to children with private or no coverage. Among children with public coverage, males of all ages had higher rates of reported ADHD with males ages 12-17 with the highest reported ADHD rate at 23%. Most children with public coverage and ADHD had moderate to severe cases as reported by their parents at 66%. Almost all children, 92%, had a co-occurring condition with ADHD. The most common co-occurring conditions were behavioral or conduct problems, learning disabilities, and anxiety problems. However, 73% of parents rated their child as having excellent or very good health. Children with public healthcare coverage who were reported to have moderate to severe ADHD had a significantly higher rate of medication use and behavioral health treatment compared to children with mild ADHD. There was no statistical difference between the rates of children on public or private coverage taking medication for ADHD nor was there a difference in these two groups concerning receipt of behavioral health treatment. Finally, CMS reiterated that states are required under EPSDT to provide screenings and treatment, including screenings and treatment for children with ADHD (CMS, October 1).

State Updates

News

California to Require IVF Coverage for Large Group Insurers

• On September 29, California Governor Gavin Newsome signed into law legislation that requires large group insurers to cover the diagnosis and treatment of infertility, which includes in-vitro fertilization (IVF). The law will be effective starting July 2025 for private-sector employees and 2027 for California state employees. Medicaid beneficiaries and people covered by religious employers are excluded. Large group plans in California cover about 9 million people. At least 15 other states already mandate some level of IVF coverage for certain insurers (Becker’s Payer Issues, September 30).

Some Rural Communities are Building New Hospitals

• Pinedale, Wyoming joins a small number of rural communities that are opening rural hospitals. The new facility in rural Wyoming will be a 10-bed hospital and similar-sized long-term care facility, anticipated to open by summer 2025. Rural hospitals have generally been facing financial challenges and struggle to stay open amid declining populations. However, federal programs, including programs funded by the USDA, support rural hospital construction projects like Pinedale’s with the goal of improving healthcare access. Freeman Health System is also planning to build a new 50-bed facility in the rural southeastern corner of Kansas. On a related matter, Congress established a new rural emergency hospital designation which allows struggling hospitals to close inpatient units and provide only outpatient and emergency services. However, only 32 of the over 1,700 eligible hospitals have joined the program since January 2023 (KFF Health News, September 27).

SPA and Waiver Approvals

Waivers

• 1115(a)
  • Michigan
    • The state submitted a request for a new section 1115 demonstration titled, “Reentry Services Demonstration,” on September 16, 2024. This waiver requests coverage for certain pre-release services to eligible individuals who are incarcerated in state prisons, local county jails, and/or juvenile facilities and are returning to the community. The federal public comment period is open through October 31, 2024.

SPAs

• Services
  • Colorado (CO-24-0003-A), effective April 1, 2024): Adds Direct-Entry Midwives (also known as Certified Professional Midwives) to midwifery provider types permitted to enroll as Medicaid providers.
  • Michigan (MI-24-1002, effective October 1, 2024): Expands applicable diagnoses for the SUD-Health Home under the state’s alternative benefit plan.
  • New Mexico (NM-24-0001, effective January 5, 2024): Establishes coverage for medically necessary biomarker testing.
  • New York (NY-23-0075, effective July 1, 2023): Establishes Medical Assistance coverage and rates for Coordinated Specialty Care (CSC), an evidence-based practice treatment model for young people experiencing their first episode of psychosis (FEP).
• Payment
  • Iowa (IA-24-0008, effective July 1, 2024): Increases the reimbursement rate for 1915(i) HCBS habilitation services.
  • Kansas (KS-24-0019, effective August 1, 2024): Increases the reimbursement rates for outpatient hospital services.
  • Michigan (MI-24-0010, effective October 1, 2024): Extends increased rates for the non-sterile glove and incontinence supply volume purchase originally implemented during the Covid-19 public health emergency.
  • Michigan (MI-24-0012, effective October 1, 2024): Implements a late-file penalty to nursing facilities that fail to complete an acceptable cost report during the state agency’s timeframes.
  • Michigan (MI-24-0016, effective October 1, 2024): Removes language relating to Paternity Confinement Expenses for the purposes of third party liability.
  • New York (NY-19-0029, effective April 1, 2019): Removes the current sunset date for Certified Home Health Agencies (CHHA) episodic payment methodology.
  • New York (NY-23-0063, effective April 1, 2023): Provides additional payments to non-state government public residential health care facilities.
  • Oregon (OR-23-0016, effective April 1, 2023): Creates a quality assurance fee for emergency medical transports and establishes an enhanced payment for non-public emergency medical transportation providers.
  • Washington (WA-24-0029, effective July 1, 2024): Clarifies that the state Legislature may increase per-diem rates for non-publicly owned hospitals and establishes that payments for services under the Substance Using Pregnant People program are excepted from the per-diem rate.

Private Sector Updates

News

Sentara Health to Cut 200 Positions Due to Medicaid Redetermination Process

• On September 27, Sentara Health announced that it will be cutting about 200 positions, following the impacts of the Medicaid redetermination process. Most of the cut positions will be within its health plan division and related operations in Virginia, 40% of which will be leadership positions. Sentara Health reported that following Medicaid redeterminations after the end of the Covid-19 public health emergency, its health plan lost about 16% of its Medicaid membership. The organization stated that those laid off will be given 60 days to continue working or transition into a new role, and that they will try to aid employees in finding new roles and other necessary support during this time (Becker Hospital Review, September 27; Health Payer Specialist, September 30).

Acadia Healthcare to Pay Millions in False Medicaid and Medicare Claims Settlement

• Acadia Healthcare Company (Acadia), a Delaware corporation that owns and operates inpatient behavioral health facilities throughout the country, has agreed to settle a lengthy case and pay $19.85 million in financial penalties after allegedly submitting false Medicare and Medicaid claims. The United States claimed that Acadia violated the False Claims Act and related state statutes by knowingly billing for medically unnecessary inpatient behavioral health services or for services that did not meet federal and state regulations. The services that the healthcare provider billed were deemed unnecessary by the joint investigation, and the United States will receive a payment of $16,663,918 to resolve Acadia’s alleged liabilities. Additionally, Acadia will pay $3,186,082 to Florida, Georgia, Michigan, and Nevada to resolve legal claims in those states (Office of Public Affairs, September 26; MSN, September 26).

Sellers Dorsey Updates

Enhancing Healthcare Quality, Equity and Access with VP of Business Operations, Sandy Lawson

• What is the importance of enhancing healthcare quality, equity, and access? Sandy Lawson, Sellers Dorsey Vice President of Business Operations and Cofounder of HealthDataViz, a Sellers Dorsey solution, shares her take. “Our analytic work at hospitals nationwide shines a spotlight on the work still needed to achieve health equity, access, and quality for vulnerable populations. Armed with the knowledge of where inequities lie and the dollars to support their efforts, providers can eliminate disparities and support everyone becoming their healthiest self.”
  Learn more about Sandy by clicking here.